Employee Benefit Program: Circuit court overrules IRS’s attempt to deny taxpayers deduction

Employee Benefit Program: Circuit court overrules IRS’s attempt to deny taxpayers deduction

Here is court case. A husband and his wife operate a farm. The husband is the owner and the decision maker on the farm. Before 2001, the wife worked for her husband on the farm for 20 years without compensation. In 2001, the wife becomes an employee of the farm supervised by the husband. The wife worked about 40 hours a week. She set up an employee medical reimbursement plan. The couple used the plan to deduct 100 percent of their federal, state and FICA taxes for family medical costs and saved on average of $4000 a year. The wife opened an individual checking account and used it to pay family insurance premiums and medical bills not covered by insurance for the couple and their two children. Besides

Employee or Independent contractor ?

On a recent court decision the tax court ruled that deputy that provide off duty services to other entities was independent contractor and not employee.